Advertising, Marketing Spend to Reach $412.4B in ’08; Shift to Company Sites

Spending on total US advertising and marketing will grow 3.9% in 2008 to reach $412.4 billion, with the advertising portion reaching $249.1 billion, according to the third annual ad spending report by Outsell, Inc., which said growth has declined from 2007’s 5.8%.

The report covers five key media types: online, print, events, TV/radio and others. Outsell surveyed 1,088 US advertisers on their spending plans for the year.

Among the significant findings:

Companies are spending 61.8% of their online ad/marketing budgets – $65.1 billion – on their own sites, siphoning dollars away from other options. As a result, publishers are beginning to offer their own advertising/marketing services to recapture lost revenue.

The fastest-growing of all ad types is online, which is expected to grow 12.3% in 2008 to $105.3 billion (or $40.2 billion excluding advertisers’ spending on their own sites). As a result, online spending now exceeds TV/radio/movies for the first time ($98.5 billion).

Advertisers’ spending on traditional media remains significant – with print capturing 35.5% of spending ($147.0 billion) and events at 12.5% of the total ($51.7 billion). 54% of advertisers spread budgets across three or more media types.

Out of 26 methods measured for effectiveness, advertisers rate their websites as the best for lead generation (75% effective), followed by exhibitions (66%), custom print publications (65%), direct mail marketing (64%), and trade magazines (64%).

Asked what metrics they would track if they could track only three, advertisers point most frequently to cost per sale (46%), cost per lead (37%), and cost per click (32%).